The Philosophy of Buying in the Technology Sector

Published: 17 October 2012

In conversations with my colleagues in the Supply Chain practice I learned, to my surprise, that IT is by far the biggest and most troublesome procurement category they deal with. Why should this be? Technology is a relatively mature market, with strong competition and established supply lines, it is also a non core activity for most businesses. So why is there such perceived difficulty?

It came to me that the answer may lie in the nature of engagement between client and supplier organisations. I consider myself a relatively savvy commercial animal; I’ve been involved in, and on the end of, some pretty robust negotiations over the years. I have also listened to IT leaders describing the fall-out from commercial arrangements gone wrong. Be that from a troubled recruitment assignment, or a technology partnership gone bad. What has happened on these occasions? Why has an agreement between two reputable organisations, populated with well meaning professionals, all of whom entered into an agreement in good faith, subsequently gone wrong?

The answer may lie in the attitude and language displayed when organisations interact with suppliers. Examples of behaviour such as ; a CIO happily describing the practice of obtaining quotes from every organisation in the field, with no intention to buy but solely to use those numbers as leverage over a preferred partner. A programme director stating his belief that the only thing technology partners understand is not getting paid. Or a hiring manager refusing to take the time to properly brief a recruiter. None of these behaviours are conducive to mutually successful relationships.

These behaviours are symptomatic of an underlying culture which existed in technology and engineering in decades past. A culture of them and us, we’re the client, we’re paying, so we call the shots. The supplier can chose to either like it or lump it. However, if we examine the nature of human interactions, ultimately people do things for people. They even do them better, more quickly, are happier about it and even do them for less money, if they actually want to. So why not step back? Take a moment to empathise with your technology partners and place yourself in their position. Who would you be more likely to go the extra mile for? A client who treats you as a “supplier” constantly beating you up on price, dropping in last minute deadlines, refusing to share information and consistently demonstrating an adversarial approach to your team? Or a partner? A client who’s negotiated a keen but fair price which rewards rather than punishes, a client who shares upstream information to allow you to plan, and a client that is unfailingly decent in relating to you and your staff?